A Look Inside Fed’s Balance Sheet — 5/28/09 Update

The Fed’s balance sheet shrunk in the latest week to $2.064 trillion from $2.165 trillion. While the central bank boosted its holdings of Treasurys and federal agency debt, the increases were more than offset by declines in direct bank lending and liquidity swaps with foreign central banks. The TALF and commercial paper facilities also shrunk in the latest week.

In an effort to track the Fed’s actions, Real Time Economics has created an interactive graphic that will mark the expansion of the central bank’s balance sheet. Every Thursday afternoon, the chart will be updated with the latest data released by the Fed.

In an effort to simplify the composition of the balance sheet, some elements have been consolidated. Portfolios holding assets from the Bear Stearns and AIG rescues have been put into one category, as have facilities aimed at supporting commercial paper and money markets. The direct bank lending group includes term auction credit, as well as loans extended through the discount window and similar programs.

Central bank liquidity swaps refer to Fed programs with foreign central banks that allow the institutions to lend out foreign currency to their local banks. Repurchase agreements are short-term temporary purchases of securities from banks, which are looking for liquidity and agree to repurchase them on a specified date at a specified price.

Click and drag your mouse to zoom in on the chart. Clicking the check mark on categories can add or remove elements from the balance sheet.

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